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Rare owns the IP so it's not like they had it and decided to give it up. Nintendo only own their own IPs.

I mean they could've bought Banjo from Rare during the split.

And why would Rare do that? That's like saying Sega should have sold Sonic when they stopped making consoles. Besides Rare made Banjo Kazooie into a great game, not Nintendo. I think a lot of people forget that.